State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

House GOP says tweaked liquor plan poised to "make history"

Written by Mary Wilson, Capitol Bureau Chief | Mar 11, 2013 4:25 PM
Thumbnail image for liquorstore.jpg

Photo by Pennsylvania Liquor Control Board website

House Republicans are still holding onto a goal of passing a liquor privatization plan in their chamber by early April, though it may not look like the governor’s original proposal to unload the more than 600 state liquor stores.

Democratic state Senator Anthony Williams of Philadelphia asserted Monday that Republicans have not coalesced around Governor Corbett’s liquor privatization plan, noting that many GOP legislators are interested first in modernizing the existing liquor system. He added that others have voiced concerns about the component that was supposed to make the whole plan go down easier: using the money generated from selling off state wine and spirits stores for one-time grants for schools.

“If privatization’s going to happen, it’s going to happen,” said Williams, “but it won’t happen at the expense or the expansion of how we fund public education in Pennsylvania.”

It’s true that the backers of liquor privatization in the Legislature speak much more about a plan that would provide adequate consumer choice than they do about one that would yield enough money to mean a substantial grant program for schools.

Rep. John Taylor (R-Philadelphia) is set to propose changes next week to the governor’s privatization plan that would keep the state stores open.

“This is significant privatization. It doesn’t go quite as far as the governor’s plan, but it goes pretty far,” said Taylor, the chairman of the House Liquor Control Committee. He allows that the revenue projections of his scaled-back liquor privatization plan wouldn’t be quite as “dramatic” as they would be under Gov. Corbett’s proposal, but Taylor hasn’t gotten the impression that’s a deal-breaker for the governor’s office. “I think our goals are the same,” he said.

Feedback from House GOP members, Taylor added, has been surprisingly positive.

“It’s a pretty remarkable thing, actually,” said Taylor. Remarkable enough to make him confident that the bill, with his drafted changes, can make it out of committee next Monday and pass a House floor vote soon after.

“I think we’ll make history next week,” said Taylor.

Last week, Gov. Corbett he is open to the idea of a plan that privatizes the sale of liquor and wine without getting rid of the state stores.

“I would be foolish to say no at this point in time, wouldn’t I?” he said. When it comes to ordering up legislation, Corbett added that he’s learned to keep his options open.

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Comments: 3

  • mrbirkos img 2013-03-11 22:21

    There is obviously a great lack of understanding about privatization. Surely everyone must realize that if it were simple, it would be done.

    For the record - there are 17 other states still in liquor sales. Only PA and Utah have retained control of both wholesale and retail.

    When public systems go private, consumers/taxpayers suffer. There is not a single state where the cash windfalls, lower prices and greater selection – promised by the privateers – have materialized.

    Washington saw only $181 million in 2012 (on sales-tax cash flow identical to our LCB), 12% permanent price increase, and diminished selection in 95% of the additional 1,100 new locations that opened virtually overnight. This segues nicely into the fact that our neighboring states, like Washington, only ask a few hundred to two thousand dollars for their off-premises licenses.

    Maine copped $125 million on a 10-year lease of their wholesale in 2004, but lost so much money (report is in the 100s of millions), that they will not renew in 2014.

    West Virginia earned less than $20 million in 1986.

    Iowa pocketed less than $20 million in 1987. Sales tax revenue did not return to 1986 levels until 2004. They kept their wholesale, as they would lose at least $60-70 million/year thereafter.

    Our prudent legislators wish to avoid similar calamities. They see that the complaints of our chronic alcohol users are mostly convenience and pricing. Modernization plans – new stores, longer hours and greater latitude with sales - will address these issues. After they are implemented, I daresay the only people still complaining will be the rich guys who want their own stores.

  • lew.bryson img 2013-03-12 00:41

    "mrbirkos," privatization IS simple. Get the state OUT of liquor AND wine wholesale and retail. Avoiding "calamities," as you put it, is similarly simple: don't get greedy. That's what happened in Washington: they slapped on new taxes, BIG new taxes, when they privatized, and of course prices went up.

    Can you tell me WHY I won't see greater selection in a privatized Pennsylvania, when I see better selection in private sale states like New Jersey, Delaware, New York, and Massachusetts? Please, explain that to me, and don't tell me about the PLCB's wonderful "online selection." I'm talking about selection ON THE SHELVES. The selection of single malts in Pennsylvania, for example, is pathetic. Yet across the river in New Jersey, I can find a much larger selection, easily. If selection is NOT better in a privatized Pennsylvania, it will be because the Legislature screwed up a simple job.

    Similarly, lower prices? I saw them in my latest shopping trip to New Jersey, and I see them in Delaware as well. There's a reason thousands of Pennsylvanians cross the border every week to buy booze somewhere -- anywhere! -- other than at the State Stores, and it's not just to avoid the terrible service and lack of product knowledge. We all know the prices are better; that's why we go there!

    Please tell me how we would make LESS money on taxes by selling the same amount of booze at the same tax rate? Sure, there's the 1% discount for prompt payment that the state's businesses get; okay, there's $4 million, a drop in the bucket for the state's budget. Meanwhile, all those thousands of people won't have to cross the border to find good selection, good prices, and good service anymore...we'll be buying in PA, and all those taxes will roll in. Sorry, not buying it. If those states lost money, it's because they screwed up their privatization.

    Are the proposed licenses too high? Fine, lower them. Will that cut the "windfall"? Who cares? Why should we get a BILLION dollar windfall for something the state's citizens don't even WANT? The PLCB partisans keep telling us that this is a "public asset" that we should treasure and never ever sell...to most Pennsylvanians, it's more like a used kleenex that we can't wait to throw away. The State Stores are an annoyance. We don't like them.

    You talk about "modernization," and mention "new stores, longer hours and greater latitude with sales." Really? You HAD more stores, and you couldn't afford to run them, so you closed them. You even warn us that more stores mean more alcohol abuse! You say you want longer hours, well, big deal: you're pretty much working bankers' hours now. And "greater latitude with sales" means monkeying with the prices; why should we trust you to lower them? More to the point, what on earth does a bureaucracy that came up with the WINE KIOSKS know about "modernization"?

    Privatization IS modernization. All these things you ask for would be ours in a privatized Pennsylvania, and MORE. I know that, because I see them across the Delaware NOW. I see them in Massachusetts, NOW. I see them in California, NOW.

    The states you mention -- West Virginia, Iowa, Maine, Washington -- couldn't bear to bite the bullet and simply privatize, they had to compromise. I dearly hope that Pennsylvania doesn't falter, that the flawed plans of Representative Taylor or Senator McIlhinney don't become law. Because then your dire predictions may actually come true, if they don't keep it simple...because they wanted to keep some vestige of the outdated, despised State Store System around.

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